The Financial Reporting Council has formally agreed proposals from the Investment Management Association that will see fund managers break down profits and losses in pounds and pence figures for the first time.
The IMA has been pushing for the change having consulted with members over the last year.
The figures will be there as a simple way to tell investors how much it has cost them to own units in a fund each year, and the IMA said now it had received sign-off from the regulatory body it could push ahead with the plans.
IMA chief executive Daniel Godfrey (pictured) said: “Our new measure is simple, easy-to-understand and covers every penny spent by a fund. This includes both the manager’s fees and all other operational costs.
“It also includes all the dealing costs and stamp duty paid when an investment manager buys and sells holdings in the fund’s portfolio. It will give investors confidence that nothing has been hidden.”
The raw data will be published in the fund’s annual report and accounts, from which the media, analysts, advisers, and consumers will be able to access the information and publish it in a simple, single pounds and pence format.
It is the latest change to impact fund pricing in a week which has already heralded the end for annual management charges (AMCs).
On Tuesday, the Financial Conduct Authority urged asset managers to move away from using the annual management charge (AMC) as their headline cost. Instead, they have pushed for a focus on the ongoing charges figure (OCF).
The IMA quickly followed up with an instruction for members to abandon AMCs and exclusively refer to the OCF in all their literature.
Meanwhile, the trade body continues to examine ways to develop a common standard for the calculation of portfolio turnover rates, in order to measure a manager’s activity and implicit costs in buying and selling shares.
